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Bitcoin Edges Lower for Third Day as Tether Drama Rolls on

Prices of the largest digital currency Bitcoin ticked lower for a third consecutive day on Wednesday, after fresh disclosures in the ongoing Tether lawsuit shed more light on one of the bigger crypto governance scandals of recent months.

On Tuesday, a lawyer for Tether – a stablecoin whose main marketing claim is that it is pegged to the U.S. dollar - admitted in court that it invested some of its reserves in Bitcoin, according to media reports. Tether shares management and ownership with cryptocurrency exchange Bitfinex.

New York's attorney-general has alleged that the companies engaged in a cover-up to hide an alleged $850 million loss of co-mingled client and corporate funds. Tether maintains that the funds have not been lost, despite being misappropriated by the payment agent that both it and Bitfinex used.

The allegations came after a report published last year looking at Tether's role in the digital currency boom concluded that Tether was used to manipulate cryptocurrency prices, and that market manipulation accounted for half of the runup.

Tether is now looking to have the case dismissed for lack of jurisdiction.

At 08:26 AM ET (12:04 GMT) Bitcoin was at $7,833.0 on the Investing.com index, off 0.7%.

Other major cryptocurrencies were mixed.

Ethereum was up 1.3% to $253.07, XRP slid 0.7% to 0.38994 and Litecoin was little changed at $90.305.

Bitcoin has been rangebound after hitting a high of $8,323.9 on May 14 following a rally that saw it nearly double since the start of April.

After crashing from record highs of close to $19,900 in December 2017 Bitcoin spent most of the first quarter of 2019 trading below the $4,000 level before regaining momentum early last month.